Business sentiments on how the economy will perform this year have taken a complete turnaround - from a bleak outlook to a more positive one, based on two separate surveys conducted among members of the Makati Business Club. The first survey - MBC's regular Executive Outlook Survey held twice a year - was conducted from January 4 to 19 during the time of former President Estrada. With the installation of President Arroyo on 20 January 2001, a second survey was conducted from January 24 to 31. The radical change in business sentiments revealed in the two surveys reinforces the belief that a change in leadership was crucial to bringing back confidence to the economy.

Looking Brighter
While majority (85%) of respondents expected the economy to perform worse in 2001 under the old administration, majority (66%) now see a brighter economic outlook this year under President Arroyo. In fact, less than 10% remain concerned that the economy will be worse off than 2000. Under former President Estrada, very few (6%) were optimistic that overall output this year will top the 2000 record.

The more optimistic sentiment is also reflected in other indicators. In the survey under former President Estrada, 92% expected inflation to be higher this year; only 45% expect that to happen under President Arroyo. The peso depreciation under former President Estrada is seen to be arrested, with majority now expecting the peso to appreciate during the Arroyo Administration.

Majority of respondents also believe that the return of confidence in the economy will translate to higher investment, export, and import levels this year. Under the new administration, 82% of respondents expect investments to increase this year versus 80% who felt investments would actually decline under the old leadership. Sixty-seven percent and 71% see exports and imports, respectively, to be higher this year compared to 44% who expected exports to reach the same level as 2000 and 58% who expected imports to be lower than the 2000 record.

According to survey respondents, among the crucial issues that the Arroyo Administration will need to address in the short-to-medium term are the fiscal deficit, governance and corruption, garbage, prosecution of former President Estrada and his cronies, and the economy.

About The Survey
MBC's Executive Outlook Survey is conducted every January and July of each year among members of the Makati Business Club. The survey has been running for almost ten years now and has been a reliable gauge of business confidence in the economy.